When buying a new development there are some hidden costs associated with the purchase. Many times these costs are not shown upfront.
Here are the five hidden costs that you should know before purchasing a new development.
Window Coverings & Appliances
Unlike resale homes, new developments may not include window coverings and appliances. Take into account these extra costs when calculating your closing costs.
It is always best to specifically ask the developer which appliances are and aren’t included can clear up any confusion and help you plan your extra spending for those items.
In many major cities, development levies have increased drastically. This can include parks, infrastructure, transit and so much more.
If these aren’t capped, they can theoretically end up costing you in the tens of thousands on top of traditional closing costs. Most lawyers recommend on having a “Cap” in place on levies. It would be best to consider this during the purchase.
Utility Hook Ups
Since this is a new development, the utilities will need to be set up for the first time. This means that the builder will charge a small fee to hook up water, gas and hydro.
You can also request a cap on utility hook ups and it would be best to discuss this with your lawyer to ensure that one is in place.
With most new homes, a Tarion Warranty is a cost that is added onto the purchase of a new development.
A Tarion Warranty is a warranty that is provided to cover your home for a certain period. Warranties can vary in years, depending on the builder. For example, a one year warranty would offer homeowners the following:
- Requires a home is constructed in a workman-like manner and free from defects in material;
- Protects against unauthorized substitutions;
- Requires the home to be fit for habitation;
- Protects against Ontario Building Code violations; and
- Applies for one year, begging on the home’s dates of possession even if the home is sold.
Even though they say the price includes HST, it does not mean you qualify for this rebate. Depending on the sale, the vendor would be claiming the HST and this means the purchaser can not.
Above all, keeping these five hidden costs in mind can help better prepare you financially.
If you are looking to learn more about buying new developments, don’t hesitate to contact me as I would be happy to help.